<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission file number 0-5576
BIOSPHERICS -Registered Trademark- INCORPORATED
- ------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 52-0849320
- --------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
12051 INDIAN CREEK COURT, BELTSVILLE, MARYLAND 20705
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(Address of principal executive offices)
301-419-3900
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(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Registrant's classes
of Common Stock, as of the latest practicable date.
Class Outstanding as of June 30, 1999
----------------------------- -------------------------------
Common Stock, $0.005 par value 9,620,952 shares
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]
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-1-
<PAGE>
BIOSPHERICS INCORPORATED
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FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 1999
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
<S> <C>
Item 1. Financial Statements (Unaudited)
Statements of Operations for the three-month and
six-month periods ended June 30, 1999 and 1998....................... 3
Balance Sheets as of June 30, 1999 and December 31, 1998............. 4
Statements of Cash Flows for the six-month
periods ended June 30, 1999 and 1998................................. 5
Notes to Financial Statements........................................ 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................. 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.................. 11
Item 6. Exhibits and Reports on Form 8-K..................................... 11
Signatures ..................................................................... 12
</TABLE>
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<PAGE>
BIOSPHERICS INCORPORATED
----------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
----------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUE $ 3,583,379 $ 5,502,110 $ 6,549,274 $ 9,030,033
----------------- --------------- ---------------- ----------------
----------------- --------------- ---------------- ----------------
OPERATING EXPENSE
Direct contract and operating costs 2,633,155 3,700,142 5,173,897 6,159,116
Selling, general and administrative expense 868,885 877,793 1,749,570 1,769,335
Research and development expense 145,286 125,022 213,507 189,206
Depreciation and amortization expense 420,425 312,795 824,432 514,673
----------------- --------------- ---------------- ----------------
Total operating expense 4,067,751 5,015,752 7,961,406 8,632,330
----------------- --------------- ---------------- ----------------
(LOSS) INCOME FROM OPERATIONS (484,372) 486,358 (1,412,132) 397,703
Other (expense) income
Interest, net (57,633) (43,542) (123,687) (32,888)
----------------- --------------- ---------------- ----------------
(Loss) income before taxes (542,005) 442,816 (1,535,819) 364,815
Income tax expense 300,000 166,661 300,000 137,671
----------------- --------------- ---------------- ----------------
NET (LOSS) INCOME $ (842,005) $ 276,155 $(1,835,819) $ 227,144
----------------- --------------- ---------------- ----------------
----------------- --------------- ---------------- ----------------
Net (loss) income per share, basic $ (0.09) $ 0.03 $ (0.20) $ 0.03
----------------- --------------- ---------------- ----------------
----------------- --------------- ---------------- ----------------
Net (loss) income per share, diluted $ (0.09) $ 0.02 $ (0.20) $ 0.02
----------------- --------------- ---------------- ----------------
----------------- --------------- ---------------- ----------------
Weighted average shares outstanding, basic 9,414,217 8,788,584 9,192,439 8,788,584
----------------- --------------- ---------------- ----------------
----------------- --------------- ---------------- ----------------
Weighted average shares outstanding, diluted 9,414,217 11,151,005 9,192,439 10,840,394
----------------- --------------- ---------------- ----------------
----------------- --------------- ---------------- ----------------
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
BIOSPHERICS INCORPORATED
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BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS JUNE 30,1999 DECEMBER 31,
(UNAUDITED) 1998
------------ ------------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 1,899,128 $ 2,288,834
Trade accounts receivable, net of allowance for doubtful
accounts of $30,000 and $145,000 2,247,547 1,642,820
Other receivables 191,947 210,188
Deferred income taxes - 114,532
Prepaid expenses and other assets 729,799 558,070
----------------- -----------------
Total current assets 5,068,421 4,814,444
Property and equipment, net of accumulated
depreciation of $3,586,912 and $2,756,472 6,898,448 6,435,581
Deferred income taxes - 185,468
Patents, net of accumulated amortization of $92,520 and $85,506 135,486 128,745
Deposit - 70,000
----------------- -----------------
Total assets $ 12,102,355 $ 11,634,238
----------------- -----------------
----------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Bank line of credit $ 1,000,930 $ 1,148,006
Accounts payable and accrued expenses 1,635,707 1,636,602
Accrued salaries and benefits 707,497 699,781
Notes payable 507,749 513,144
Capital lease obligations 387,286 394,143
Deferred revenue 111,161 144,804
----------------- -----------------
Total current liabilities 4,350,330 4,536,480
Notes payable 417,203 672,930
Capital lease obligations 464,844 649,447
Deferred rent 88,462 106,923
Deferred revenue 1,000,000 1,000,000
----------------- -----------------
Total liabilities 6,320,839 6,965,780
----------------- -----------------
Redeemable common stock, 3,213,506 shares 325,710 325,710
----------------- -----------------
Stockholders' equity
Preferred stock, $0.01 par value, 2,000,000 shares authorized;
none issued and outstanding - -
Common stock, $.005 par value, 18,000,000 shares authorized; 9,655,190 and
8,973,691 issued, 9,620,952 and 8,933,085 shares outstanding,
of which 3,213,506 shares are classified as redeemable common stock
at June 30, 1999, and December 31, 1998, respectively 32,208 28,801
Paid-in capital in excess of par value 7,818,214 4,912,744
Treasury stock, 34,238 and 40,606 shares at cost, at June 30, 1999 and
December 31, 1998, respectively (222,106) (267,369)
Accumulated deficit (2,172,510) (331,428)
----------------- -----------------
Total stockholders' equity 5,455,806 4,342,748
----------------- -----------------
Total liabilities and stockholders' equity $ 12,102,355 $ 11,634,238
----------------- -----------------
----------------- -----------------
</TABLE>
See accompanying notes to financial statements
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<PAGE>
BIOSPHERICS INCORPORATED
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STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
----------------------------------
1999 1998
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $ (1,835,819) $ 227,144
Adjustments to reconcile net (loss) income to net cash
used in operating activities:
Depreciation and amortization 837,454 514,673
Loss on sale or write down of assets - 56,464
Treasury stock issued in payment of expense 40,000 -
Changes in assets and liabilities:
Trade accounts receivable (489,727) (1,642,599)
Provision for uncollectible accounts receivable (115,000) (15,000)
Other receivables 18,241 (168,418)
Prepaid expenses and other assets (171,729) (246,113)
Prepaid income taxes - (43,604)
Deferred income taxes 300,000 151,501
Accounts payable and accrued expenses (71,370) (44,941)
Income taxes payable - (215,226)
Deferred rent (18,461) (9,799)
Deferred compensation - 522
Deferred revenue (33,643) 134,657
--------------- ---------------
Net cash used in operating activities (1,540,054) (1,300,739)
--------------- ---------------
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property and equipment (1,223,307) (2,411,895)
Restricted cash, security deposit - 27,408
Additions to patent costs (13,755) -
--------------- ---------------
Net cash used in investing activities (1,237,062) (2,384,487)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change on bank line of credit (147,076) 1,066,184
Net change in book overdraft 78,191 942,475
Proceeds from notes payable - 580,812
Payments on notes payable (261,122) (219,788)
Payments on capital lease obligations (191,460) (105,302)
Proceeds from issuance of common stock 2,918,496 -
Cost of issuance of common stock (9,619) (29,716)
--------------- ---------------
Net cash provided by financing activities 2,387,410 2,234,665
--------------- ---------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (389,706) (1,450,561)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,288,834 5,228,773
--------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,899,128 $ 3,778,212
--------------- ---------------
--------------- ---------------
</TABLE>
See accompanying notes to financial statements
-5-
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BIOSPHERICS INCORPORATED
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NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying interim financial statements of Biospherics
Incorporated (the "Company") do not include all of the information and
disclosures generally required for annual financial statements and are
unaudited. In the opinion of management, the accompanying unaudited financial
statements contain all material adjustments (consisting of normal recurring
accruals) necessary to present fairly the Company's financial position as of
June 30, 1999, and the results of its operations for the three-month and
six-month periods ended June 30, 1999 and 1998 and its cash flows for the
six-month periods ended June 30, 1999 and 1998. This report should be read in
conjunction with the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1998.
2. NET INCOME (LOSS) PER SHARE
Basic earnings (loss) per common share have been computed by dividing
net income (loss) by the weighted-average number of common shares outstanding
during the year. Diluted loss per common share have been computed by dividing
net loss by the weighted-average number of common shares outstanding without
an assumed increase in common shares outstanding for common stock equivalents
during 1999, as stock equivalents are antidilutive. During 1998, diluted
earnings per share have been computed by dividing net income by the
weighted-average number of Common Shares outstanding with an assumed increase
in Common Shares outstanding for Common Stock equivalents.
3. INCOME TAXES
Based on the Company's losses for the six months ended June 30, 1999,
and its accumulated deficit, the Company has provided a full valuation allowance
against the net deferred tax asset.
4. DEFERRED REVENUE
Deferred revenue includes a $1,000,000 non-refundable advance against
future royalties from the D-tagatose licensing agreement with MD Foods
Ingredients amba of Denmark. The advance will be recoverable at 50% of such
annual royalties.
5. PRIVATE PLACEMENT
In December 1997, the Company completed a $3 million private offering
of 375,000 units to a single institutional investor (the "Investor"). Each
unit consisted of two (2) shares of Common Stock and two (2) Warrants, with
exercise prices of $4.00 and $4.50 per share, respectively. The Warrants were
exercisable throughout a three (3) year period. All shares issued in
connection with the December 1997 private placement, including all which may
be issued pursuant to exercise of the Warrants, have been registered by the
Company's Registration Statement on Form S-3 (Registration No. 333-44973).
Prior to March 31, 1999, the Investor exercised warrants with an
exercise price of $4.00 per share for 125,000 shares of Common Stock. On
March 31, 1999, the Investor agreed to exercise the balance of its $4.00 per
share Warrants (i.e., for 250,000 shares of Common Stock) in consideration
for the Company's grant to the Investor of a new three-year Warrant for
250,000 shares of Common Stock with an exercise price of $8.00 per share (the
"1999 Warrant I"). As part of the transaction, the Company has registered the
shares of Common Stock underlying the 1999 Warrant I.
On May 21, 1999, the Investor agreed to exercise all of its $4.50 per
share Warrants (i.e., for 375,000 shares of Common Stock) in consideration
for the Company's grant to the Investor of a new three-year Warrant for
375,000 shares of Common Stock with an exercise price of $6.40 per share (the
"1999 Warrant II"). As part of the transaction, the Company has registered
the shares of Common Stock underlying the 1999 Warrant II.
The shares underling the 1999 Warrant I and the 1999 Warrant II, have
been registered by the Company's Registration Statement on Form S-3
(Registration No. 333-79593).
6. TREASURY STOCK TRANSACTION
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<PAGE>
BIOSPHERICS INCORPORATED
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During April 1999, the Company issued 6,368 shares of Common Stock
previously held in the treasury in payment of expenses. The excess of the
purchase price of the treasury stock over the value of the stock on the date
of issuance has been charged to retained earnings in the amount of $5,263.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements in this Quarterly Report on Form 10-QSB may contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
and are identified by the use of forward-looking words or phrases such as
"believes," "expects," is or are "expected," "anticipates," "anticipated,"
"should" and words of similar impact. These forward-looking statements are
based on the Company's current expectations. Because forward looking
statements involve risks and uncertainties, the Company's actual results
could differ materially. See the Company's Form 8-K filing dated March 26,
1999, for a more detailed statement concerning forward-looking statements.
Operating segments are components of an enterprise about which
separate financial information is available that is evaluated regularly by
the chief operating decision maker, or decision making group, in deciding how
to allocate resources and in assessing performance. The Company is managed
along two business segments, the Information Services Division (ISD) and the
BioTech Programs Unit.
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND
1998
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------------------- -----------------------------------
1999 1998 1999 1998
---------------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
INFORMATION SERVICES
Revenue $ 3,510,805 $ 5,433,972 $ 6,430,547 $ 8,915,114
Operating expense 3,923,317 4,892,220 7,691,789 8,434,586
---------------- ---------------- ---------------- ------------------
Operating profit (loss) $ (412,512) $ 541,752 $(1,261,242) $ 480,528
---------------- ---------------- ---------------- ------------------
---------------- ---------------- ---------------- ------------------
BIOTECH
Revenue $ 72,574 $ 68,138 $ 118,727 $ 114,919
Operating expense 144,434 123,532 269,617 197,744
---------------- ---------------- ---------------- ------------------
Operating loss $ (71,860) $ (55,394) $ (150,890) $ (82,825)
---------------- ---------------- ---------------- ------------------
---------------- ---------------- ---------------- ------------------
</TABLE>
The Company reported a net loss of $842,005 ($0.09 per share, diluted)
on sales of $3,583,379, and a net loss of $1,835,819 ($0.20 per share,
diluted) on sales of $6,549,274 for the three months and six months ended
June 30, 1999, respectively.
The ISD's revenue for the three and six months ended June 30,1999,
decreased $1.9 million and $2.5 million, respectively, in relation to the
same periods in 1998. The decrease in revenue is primarily the result of the
realization of less than projected business growth of the National Park
Service contract, augmented by the completion of two contracts in 1998.
Facing these challenges the Company has performed significant re-engineering
efforts across its business lines, Corporate structure, and its Divisional
structure over the past two quarters. The Company has also taken steps to
reduce overhead costs to increase its competitiveness in the marketplace.
These efforts have increased profitability in the Health and Commercial
business, to make this line the profit leader for the Company. The government
projects business has also seen significant results in increased
profitability on all business, with the exception of the National Park
Service contract. With the addition of scheduled new business for the
up-coming Park season and the incorporation of performance-enhancing
initiatives, greater returns on the Park Service contract are anticipated.
The Company is currently negotiating on several new commercial contracts and
anticipates seeing results of these efforts in the fourth quarter of 1999.
-7-
<PAGE>
BIOSPHERICS INCORPORATED
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BioTech revenue for the three and six months ended June 30, 1999, were
consistent with those of the prior year. Increases in operating expenses are
a result of the expansion of the BioTech laboratory. In addition to an
initial license fee of $1.5 million, the Company received payment aggregating
$1,000,000 in the first quarter of 1997 under the MDFI License Agreement
representing a non-refundable advance against future royalties. This payment
is classified as deferred revenue in the balance sheet.
Selling, general and administrative expenses ("S,G&A") for the three
and six months ended June 30, 1999, were consistent with those of 1998.
Depreciation expense increased $107,630 and $309,759 for the three and
six months ended June 30, 1999, compared with the same periods in 1998. The
increase was due to the Company's increased investment in technology and
product development. Included in the research and development expense for the
six months ended June 30, 1999, is depreciation expense of $13,022.
Based on the Company's losses for the six months ended June 30, 1999,
and its accumulated deficit, the Company has provided a full valuation allowance
against the net deferred tax asset.
LIQUIDITY AND CAPITAL RESOURCES
The Company renewed its Loan Agreement (the "Agreement") with
NationsBank N.A. (the "Bank") on May 18, 1998, which provides for borrowing
up to $2 million, subject to advance rates as defined in the Agreement. This
Agreement has been extended through the end of August. Outstanding borrowings
under the Agreement aggregated $1,000,930 at June 30, 1999, and are
collateralized by the Company's accounts receivable. The interest rate is the
Bank's prime rate plus .75% per annum. The Loan Agreement contains covenants
that require the Company to meet certain tangible net worth and cash flow
coverage ratios. The Company was in violation of the bank covenants as of
December 31, 1998. The violation was waived by the Bank. As of June 30, 1999,
the Company was in compliance with the bank Covenants. The line expires on
August 31, 1999, but the Company anticipates that the line will be renewed.
However, if the Company is unable to extend the line of credit and obtain
adequate financing, material adverse consequences could result.
The Company also renewed, on May 18, 1998, a commitment from the Bank
to assist in financing equipment purchases related to potential new
contracts. This arrangement consists of a series of loans for the acquisition
of computer systems and related telecommunication equipment not to exceed a
maximum aggregate of $1 million. Additional terms include repayment of each
loan in thirty-six (36) equal monthly installments at a fixed interest rate
equal to the Treasury Index plus 275 basis points. Outstanding borrowings
under this commitment aggregated $630,686 at June 30, 1999, and that amount
is collateralized by the equipment purchased.
Cash flow for the six months ended June 30, 1999, reflects a net cash
outflow of $389,706, resulting from $1.5 million used in operating activities,
$1.2 million used in investing activities, and $2.4 million provided by
financing activities. Cash flow from operating activities in the first half
of 1999 decreased $239,315 from those of the prior year. The decrease in
operating cashflow is the result of two contracts which were completed in
1998 and to disappointing returns on the National Park Service contract.
Investment in property and equipment aggregated $1.2 million, and represented
a $1.2 million reduction from that of the prior year as a result of the
completion of the Company's major product development, which includes the
computer-telephony integration (CTI) system, ReserveSuite(TM) and
HealthSuite(TM). The investment was used in upgrading the Company's
information and telecommunications systems, and in the continued development
of the Company's new software products used by ISD. The Company considers the
development of these products adequate for the near term. It does not
anticipate major continued capital investment. The above investments were
financed in part through proceeds from the exercise of stock warrants and
borrowings under the Bank's equipment lines of credit.
Working capital as of June 30, 1999, was $718,091, which represents a
$2.1 million decrease from working capital of $2.8 million at June 30, 1998,
but an increase of $644,147 over working capital as of March 31, 1999. This
decrease was the result of continued investment in telecommunication and
computer systems, the development of computer software products to improve
the Company's long-term competitive position, the Company's entry into the
healthcare Demand Management business in 1998, and the operating losses
incurred by the Company. Future capital requirements to start new contracts
and maintain existing programs will be proportionately less.
It is anticipated that royalties on sales by MDFI could begin in 2001.
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BIOSPHERICS INCORPORATED
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Y2K DISCLOSURE
GENERAL
Biospherics Incorporated utilizes software, information systems and
infrastructure components that may be affected by Year 2000 issues. During
fiscal year 1998, the Company began to implement plans to ensure those
systems continue to meet its internal and external requirements via its Y2K
Project (Project). During fiscal year 1998, the Company's largest division,
Information Services Division, completed modifications and testing of its
primary information systems. These systems modifications included a complete
modernization of the Company's infrastructure systems, as well as testing and
modification to all critical and secondary enterprise systems.
The Company is in the process of obtaining the remaining 10% of the
determination documentation from vendors for Year 2000 impact. The Company
will continually monitor its vendors, suppliers, and is now focusing on
clients to evaluate their progress and impact. The Company has evaluated its
non-information systems components; such as, facility systems, telephone
services, and the like. To date, evaluations have yielded marked progress in
all third party areas with no evidence of critical issue or impact.
PROJECT
Biospherics' Project was designed to address internal and external
components. It was phased, running from the third quarter of 1998 and
concluding in the second quarter of 1999, the project included a detailed
milestone and project timeline. Biospherics' Project is on target and
schedule, with phase one of the Project completed with the development of an
inventory of all systems internal and external to the Company. Phase two of
the project was completed with an assessment of the inventory of systems
internal to the Company. Phase three and phase four run parallel in timeline;
phase three was on target for completion in the first quarter of 1999 with
the plan and schedule for any and all remediation for systems internal to the
Company. Phase four was also on target for completion in the second quarter
of 1999 with the assessment of all systems external to the Company. Phases
five and six, completion phases of the Project, are on schedule and are in a
closing and monitoring phase.
CONCLUSION AND COSTS
Based on the progress the Company has made in addressing its Year 2000
issues and the fact that many of the Company's information systems are
already serving year 2000 future dates in production, the Company does not
foresee significant risks associated with its Year 2000 compliance at this
time. Projected expenses of remediation efforts and updates were budgeted for
a total of $450,000, to date compliance and remediation costs have totaled
approximately $200,000. If the Company identifies, in the course of its
active and continual monitoring, any significant risks related to its Year
2000 compliance, the Company will develop more in depth contingency plans as
deemed necessary at that time.
RISKS
The failure to successfully complete the Biospherics Y2K Project,
identifying and remedying all critical potential failures internal and
external to the Company, could result in an interruption in normal business
processes or sub-processes. Such failures could negatively impact the
Company's operations and, as a result, impact the Company's financial
condition. The Y2K industry problem holds inherent uncertainty, therefore, it
is impossible at this time for Biospherics to affirm with certainty the level
of impact from vendors, suppliers, and clients. The Biospherics' Project was
designed to reduce this level of uncertainty with regard to Y2K compliance
and readiness of internal and external systems. Biospherics believes that
with the progress of the Project, outcomes of testing, and the production
systems already serving the Year 2000, that the possibility of negative
impact and operational interruptions will be significantly reduced.
-9-
<PAGE>
BIOSPHERICS INCORPORATED
----------
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the Company was held on May 17,
1999, where the following actions were taken:
(1) On May 17, 1999, Gilbert V. Levin, Lionel V. Baldwin, David A. Blake, A.
Bruce Cleveland, George S. Jenkins, M. Karen Levin, and Anne S. MacLeod were
elected as directors to serve until the next Annual Meeting pursuant to the
following vote tabulation:
<TABLE>
<CAPTION>
Shares Shares Shares Shares
NAME VOTES FOR VOTES AGAINST VOTES ABSTAINED UNVOTED
- --------------------------- ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Gilbert V. Levin 8,507,356 79,590 0 0
Lionel V. Baldwin 8,509,488 77,458 0 0
David A. Blake 8,509,488 77,458 0 0
A. Bruce Cleveland 8,505,488 81,458 0 0
George S. Jenkins 8,509,488 77,458 0 0
M. Karen Levin 8,506,956 79,990 0 0
Anne S. MacLeod 8,505,488 81,458 0 0
</TABLE>
(2) The selection of PricewaterhouseCoopers LLP as independent accountants of
the Company for the year ending December 31, 1999, was ratified, with
8,510,299 shares voted in favor, 36,551 shares voted against, 40,096 shares
abstaining, and no shares unvoted.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
On April 15, 1999, the Company filed a report on Form 8-K dated March
31, 1999, pursuant to Item 5 thereof, to report the issuance of a new
three-year Warrant for 250,000 shares of Common Stock in consideration of the
exercise of existing Warrants.
On May 24, 1999, the Company filed a report on Form 8-K dated May 18,
1999, pursuant to Item 5 thereof, to report the issuance of a new three-year
Warrant for 375,000 shares of Common Stock in consideration of the exercise
of existing Warrants.
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<PAGE>
BIOSPHERICS INCORPORATED
----------
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BIOSPHERICS INCORPORATED
-----------------------------
(REGISTRANT)
Date: AUGUST 12, 1999 By: /S/ GILBERT V. LEVIN
-------------------- -----------------------------
Gilbert V. Levin
Chairman of the Board,
President, and Treasurer
-11-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JAN-30-1999
<CASH> 1,899,128
<SECURITIES> 0
<RECEIVABLES> 2,277,547
<ALLOWANCES> 30,000
<INVENTORY> 0
<CURRENT-ASSETS> 5,182,953
<PP&E> 10,485,360
<DEPRECIATION> 3,586,912
<TOTAL-ASSETS> 12,402,355
<CURRENT-LIABILITIES> 4,350,330
<BONDS> 0
0
0
<COMMON> 32,208
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,402,355
<SALES> 3,583,379
<TOTAL-REVENUES> 3,583,379
<CGS> 4,067,751
<TOTAL-COSTS> 4,067,751
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57,633
<INCOME-PRETAX> (542,005)
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</TABLE>
